Personal Loan Applications: How Are They Processed?
Every financial institution operates in a different way with different goals and expectations. While some, like Bajaj Finserv, allow you to apply online for a Personal Loan, others require you to submit the appropriate documents first in order to assess your application for a Personal Loan. They are stringent in choosing who they offer a loan to as they need to be minimise their risk.
Below are a few criteria or, as we’d like to call them, the 6 ‘C’s based on which banks grade your eligibility for Personal Loans:
- Credit History
Money lenders judge you by your credit score. They monitor your track record, right from your spending habits and your attitude towards making payments on time. Your credit history also contains inputs from other lenders who have extended loans to you. This means a bad credit history will spoil the chances of your application getting through.
Collateral is something you pledge as a security for the loan you take. This aspect applies mainly for secured loans, such as a home loan or an auto loan. Banks evaluate the value of the collateral by subtracting any debt against it. The remaining equity is considered before the banks make a decision in lending you the money.
For many, the primary source of funds for repayment of a loan is a salary. But never forget that other liquefiable assets like savings and investments can assist you in your pursuit to repay the loan amount. Capital can also help in case you lose your job and are in need of finances.
Lenders take note of your present and past employment history to determine how proficient you can be in repaying your pending loans. When doing this, bankers also consider your income amount, type of income, and stability before they decide on approving your loan application.
Financial institutions have a right to keep a close watch on their investments, hence they will ask why you need the money. When this question pops up, you’ll need to prepare your case and ensure that they take you needs seriously.
Consider that you have never had any line of credit because you had a steady job with a steady income but due to circumstances you are in need of money. This is when your character plays a major role in dictating whether they endorse your application..
There are several financial service providers, like Bajaj Finserv, that take online Personal Loan applications and approve them within as little as 5 minutes. All you need to do is fill out the application form and get instant approval on your loan. Once your loan is approved, only then you will be required to submit your documents. Bajaj Finserv also offers features and insights like Personal Loan interest rate and Personal Loan EMI calculators.